PG&E Announces Record-Breaking Profits for 2024 While Customers Are Hit with Record-Breaking Utility Bills
Last Year’s Profits of $2.48 Billion Follow Six Rate Increases in 2024; Consumer Advocates Call for Reform
SAN FRANCISCO — Pacific Gas & Electric (PG&E) today reported a 10% increase in profits from 2023 to 2024, totaling $2.48 billion dollars. This significant growth stems from six separate rate increases approved by the California Public Utilities Commission (CPUC) last year, raising customers’ bills by 20%. The utility's earnings have skyrocketed over the past two years, with profits having already jumped 25% in 2023.
The rate hikes and profits follow the utility’s recent disclosure that it spent $3.6 million on lobbying and public influence efforts in 2024. Additionally, the company ranked 10th in statewide influence spending during the 2023-2024 legislative session, totaling $6.7 million.
"While utility executives and shareholders reap billions and spend millions to curry influence with lawmakers, customers are forced to choose between basic necessities and utility bills," said Lee Trotman, Communications Director of The Utility Reform Network (TURN). "This situation demands immediate legislative and regulatory action to curtail excessive profits, eliminate wasteful spending, and protect the public."
“PG&E’s profit surge is yet another example of corporate greed standing in the way of California’s climate progress," said Mary Creasman, Chief Executive Officer at California Environmental Voters. "At a time when we need urgent investment in clean, affordable energy, PG&E is padding its bottom line while ratepayers foot the bill. Regulators and lawmakers must step up to rein in these runaway profits and ensure utility companies are working to create affordable rates and resiliency for Californians."
A key driver of utility profits is the "rate of return" – the percentage profit utilities can earn on investments and recover through customer bills. The state’s utility regulators have allowed PG&E to make sky-high profits from investments in infrastructure like overly expensive power lines and wildfire mitigation equipment, incentivizing spending that is not in customers’ best interest when more effective, affordable alternatives are available.
Currently, PG&E's authorized 7.28% rate of return for 2023 has contributed to a growing disparity between the rates that for-profit and public utilities charge customers. For-profit utility rates in California now exceed public utility rates by 67%.
“The rate of return issue is the 800-pound gorilla in the room, and it’s high time the PUC dealt with it rather than pumping up investor profits at ratepayers’ expense,” said Jamie Court, President of Consumer Watchdog. “If the PUC doesn’t address the outrageous profits for PG&E coming from outrageously high utility bills, then the legislature must do it. Ratepayers at California’s investor-owned utilities deserve more affordable electricity.”
The CPUC will launch a proceeding in late March to evaluate the rate of return structure. Commissioner Darcie Houck recently acknowledged that authorized returns significantly exceed market standards and are fueling the state's electricity affordability crisis.
Meanwhile, the legislature is expected to consider several bills that would stop for-profit utilities’ price gouging and protect consumers, with the deadline to introduce bills set for Friday, February 21. Anticipated in the package would be legislation that makes utilities prioritize affordable service by requiring more effective wildfire safety measures, protects vulnerable households from disconnections as bills rise and utilities make record profits, and establishes public financing authority for big infrastructure projects like transmission lines that will save customers money.
"California’s energy future can be affordable and clean, but to get there, we need to rein in out-of-control spending and profiteering by utilities like PG&E. We can’t afford to let this continue," said Trotman.
Contact: Lee Trotman • Ltrotman@turn.org • (415) 248-8446
Blake Marquez • Blake@sunstonestrategies.com • (310) 894-6690
